CAPSIM

[Name]

[Team Name]

[Product Name or Names]

[Market Country or Countries]

[Course Name]

[Course Section Number]

[Instructor]

[Date Submitted]

Project 4 Analysis Directions: Write your answers below each question. Please do not delete the questions.

1. What strategy were you implementing? What type of product (speed, accuracy, service life, and price) did you design in Round 1? Explain how your settings for speed, accuracy, service life, and price in Round 1 were driven by the chosen strategy.

The strategy implemented in the four rounds is operational. It is concerned with translating the business strategy into a cohesive and actionable implementation plan. The operating process entails changing business strategies to suit the goals and objectives of the organization (Holotiuk & Beimborn, 2017). It is in the organization's best interests to ensure efficiency and effectiveness of operations and enable the organization to increase its market share in the U. S. A., China, and Germany. The organization has provided increased awareness of the organization's organization as organizations will ensure proper market penetration.

The organization will always ensure that sales have increased. This is followed by increased market awareness and customer targeting. The deals will increase across the period, as evidenced by improved customer targeting (Holotiuk & Beimborn, 2017). The organization also experienced high sales in high-tech areas as the organization strives towards increasing customer share in the industry.

2. How did you create a sales forecast in each round? Explain. For Round 1 only, how did you use the sales forecast for capacity planning?

I started by stating the goals of the forecast. This depends on the stage of the organization. I defined the elements of a prediction. It is followed by clarifying and communicating the sales stages and articulating what it takes to get from one location to the next. The sales stages are defined to set the exit criteria and the system artifacts. This enables the section to have an accurate forecast (Fan, Che & Chen, 2017). The only source of the estimates is customer relationship management, as other sources may be untrue. With defined terms, a straightforward sales process, and usage of the system, one should deliver a solid booking of the forecast.

As the organization has forecasted its sales based on previous information. It enables the organization to be at par between the indicated operations and the actual operations. Forecasted assisted in capacity planning as the organization has low variations in sales across the years. This has been evident in most countries. The organization can also anticipate the amount to produce to meet the sales and know the profit to be realized in the next financial year (Fan, Che & Chen, 2017). Moreover, the management can also plan on the price to sell based on the data received. They can work to enhance productivity in the organization by looking for ways to increase the target sales. They will also look at strategies to maintain increased sales.

3. What was the level of automation in your plant? Why? Discuss the role of contribution margins, if any, in your decisions regarding automation.

Automation is the process of making a process operate automatically. Automation may be in the form of a product, process, system, among other elements. The organization uses flexible automation, which is an extension of programmable automation. Inflexible automation, the variety of products is sufficiently limited so that the changeover of the equipment can be done quickly and automatically. The reprogramming of the equipment in flexible automation is done off-line in that the programming is accomplished at a computer terminal without using the production equipment itself (Kaber, 2018). A transfer system connects these production lines to move between departments in a business.

The contribution margin is calculated by subtracting the total variable costs from variable sales. The contribution margin shows you how the aggregate amount of revenue available after variable costs cover fixed costs. The contribution margin ratio is as follows: . The contribution will determine the automation practice as increasing contribution will ensure that the system adjusts the revenues and expenses, which will affect the profit or loss of the organization. In some instances, the program may have a constant contribution; the sales and variable costs can change while the contribution remains constant (Kaber, 2018). That is why flexible automation is required.

4. Are you running a second shift? Why or why not? Did you have inventory issues in any round? Explain.

A second shift is required. This shift will ensure that the entries recorded are genuine as they have been stated (Singh & Verma, 2018). Moreover, it is best if the management sees any variations between the first and second shifts. There may be variations from the second shift, and the administration will devise plans to mitigate these variations. Having two comparable values also creates room for the system's credibility as data is not analyzed independently. Instead, it uses comparison sets. Running a second shift will also enable the management to increase productivity as they will be confident in the data set and forecasts.

While conducting the second shift, there may be issues concerning inventory levels. This may come since inventory determines the organization's sales, purchases, and profits to be realized. With that in mind, it is essential to see the difference in the production and capacity for all elements and ascertain that all products are produced relatively and will not result in losses. Inventory-level variations may also come from changing preferences and tastes for customers, which the management has to consider. Other elements that may affect the inventory levels include the income of the market. The organization expects that the organization will have increased profits from the sale of products as the income earned by people is very high. Moreover, the government may intervene in the production process, affecting operations and leading to variations in inventory (Singh & Verma, 2018).

5. Which country (or countries) and customer segment (or segments) were you targeting your product and why? Describe any two marketing decisions you implemented over the four rounds to enable your desired targeting. If you introduced a region kit, describe how that affected your sales.

The country targets the most in terms of production include the USA. This is because the government has a high speed, accuracy, and the degree score is high. Management prefers such organizations in that there is a ready demand for their products. This enables the organization to focus more on customer satisfaction since they are already there. Moreover, the USA has reduced the cost of operations which makes the business earn high-profit margins. This also applies in china which has a high speed and accuracy. German has the lowest, and the management finds it difficult to invest in a country with low sales. It also means that German has increased production costs, making the revenue streams from the government deficient (Holotiuk & Beimborn, 2017).

Customers who consume Daze, East, and fast are most preferred in the organization than other product segments. This is because these products have a higher speed, higher accuracy, and service life, making the design score very high. It means that products are processed and sold with reduced costs in marketing, sales, and production. This enables the organization to focus on increasing quality as these products have increased sales compared to other products such as Able, Baker, and Cake. Organizations will benefit from increased economies of scale and productivity (Holotiuk & Beimborn, 2017).

6. Remembering what you have learned in MBA 620 and referencing the financial accounting ratios, calculate the net profit margin ratio at the end of Round 4. What does this Ratio tell you about the profit being generated?

The net profit margin ratio compares a company's profits to the total amount it brings in. It measures how effectively a company operates. If an organization has a 20% net profit margin, it keeps $0.20 in every $1 in sales revenue. The net profit margin for the years 2022 to 2025 is 4.52%, 5.27%, 5.42%, and 6.73%. An ideal result should be above 8%. Analysts will use the information to determine financial stability (Orhangazi 2019). The organization is close to being efficient as a perfect margin should be above 8%. However, the organization is not badly off as it can generate profits. This efficiency is required as it makes a company more likely to survive when a product line does not meet expectations or when a product of economic fluctuations hits the border economy (Orhangazi 2019). The net profit margin is calculated by dividing the net profits over the net sales. This is as shown: .

Profit is the result of the difference between revenues and costs. The profit margins have been increasing over time. It means that the organization has been increasing its efficiency. It may be as a result of increased sales and reduced costs. This tells us that the organization is expanding its efficiency in converting sales into profits (Orhangazi 2019). It describes the percentage of revenues that are profits that are profits.

7. Examining the balance sheet at the end of each round, calculate the current Ratio for each round. Next, perform a trend analysis based on the current Ratio you calculated for each game's end. Do you find the current Ratio increasing or decreasing through the four games? (Keep in mind, if the current ratio is below 1, the company does not have enough in existing assets to cover current liabilities if the current liabilities were all due at once). At the end of Round 4, can the company satisfy current liabilities?

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It tells investors and analysts how an organization can maximize its current assets on its balance sheet to satisfy the debt and other payables. The Current Ratio is computed by dividing the existing support from current liabilities (Öztürk & Karabulut, 2018). The values derived from the Current Ratio from 2022 to 2025 are 3.25, 4.77, 1.78, and 3.05. respectively. From the information provided, it is evident that the current Ratio is increasing across the period. A current ratio that is in line with the industry average or slightly higher is generally considered acceptable.

A current ratio lower than the industry average may indicate a higher risk of distress or default. Moreover, if an organization has a higher current ratio than the peer group, it suggests that management may not use their assets efficiently. Others will call it the working capital ratio. Its formula is as follows . A current ratio analysis is used to measure the ability of an organization to pay its short-term obligations. From the information provided from the balance sheet, it is evident that the current Ratio is higher than the suggested level (Öztürk & Karabulut, 2018). It is suitable for business as operations are running swiftly.

8. Understanding how efficiently your company is operating is essential from operations and finance perspective. The best way to measure operational efficiency through financial statements is through working capital. Calculate working capital for Round 4 using the balance sheet for your calculation. How efficiently is your company operating? (Keep in mind, an excellent working capital ratio is between 1.2 and 2.0).

Working capital is a financial metric representing operating liquidity available to a business, organization, or other entities, including governmental entities (Taghipour, Habibi & Amin, 2020). Others will refer to it as the networking capital. It describes the difference between the current assets and the current liabilities. Net operating working capital is a measure of a company's liquidity. In most instances, these calculations are the same and are derived from company cash plus inventories, fewer accounts payables, and accrued expenses. The working capital ratio formula is calculated by dividing the total current assets by the total current liabilities. A proper current ratio is between 1.2 and 2.0. From the organization's information in round 4, the Current Ratio, which is also the working capital ratio, is 3.05.

This value is higher than the rest of the organization's working capital. Moreover, the working capital ratio shows how effective an organization manages its resources to earn revenues. Corporations should focus on improving their current assets, which should be higher than the current liabilities. Moreover, the institution has an increased working capital. This explains why the organization has grown assets and reduced penalties (Taghipour, Habibi & Amin, 2020). In other instances, a working capital higher than two is not considered to be better as it is considered inefficiencies. It means that many assets lie idle instead of investing those assets to grow and expand its business.

9. At the end of Round 4, how aware are consumers of your product in each country? How accessible is your product to the consumers in each country? How did your awareness and accessibility change from Round 3 to Round 4, and did that have any impact on your sales?

Customers in each country are increasing in number. This has been attributed to the company being recognized by many persons as the organization has invested in marketing and operations. The data shows that the organization reduces its costs of meeting clients as customer awareness has increased. Customers love their products and are becoming brand ambassadors since sales are growing across the year (AL-hazmi & Hassan, 2020). Moving from round one to four, there has been an immense change in sales. This means that the organization maintains consistency in operations and increases profitability by investing in the customer, increasing the frequency of sales.

Customers quickly access the product as they are aware of the product and are concerned about the organization's brand's welfare as quality has not been compromised. Customers' awareness from round 3 to round 4 has changed due to customer loyalty and brand recognition in society. It is imperative not to mention factors such as increased product promotion conducted during the previous years have enabled the organization to penetrate the market (AL-hazmi & Hassan, 2020). This affects sales increase which replicates in the income statement and balance sheet.

10. Did your team's decisions in Rounds 1-4 always align with the chosen strategy? If you found yourself deviating from your procedure, explain why. In hindsight, what decisions would you have made differently? Explain.

The organization aligned with the chosen strategy. With that in mind, the organization could increase profits and have increased customer awareness of the products in the three countries. The organization is growing in value, as evidenced by the Current Ratio and the working capital ratio. Investors can get to put their resources in the organization to increase return on their investments. Across the rounds, the organization has been experiencing increased sales as compared to the costs. The organization has increased the market share as evidenced by the increased number of customers in the three countries (Holotiuk & Beimborn, 2017).

Some decisions that came by include marketing strategy where customers branded the organization. Moreover, as we move towards round 4, the organization experienced increased market share as the organization had penetrated the market and customers were aware of the organization. The marketing expenses reduced as customers became product promoters (Holotiuk & Beimborn, 2017). Additionally, the management increased the products' speed and accuracy, which enabled increased production to meet the increasing demand.

References

AL-hazmi, N., & Hassan, Y. (2020). Barriers on marketing tourism services and their impacts on customer awareness. Management Science Letters, 10(11), 2603-2608.

Fan, Z. P., Che, Y. J., & Chen, Z. Y. (2017). Product sales forecasting using online reviews and historical sales data: A method combining the Bass model and sentiment analysis. Journal of Business Research, 74, 90-100.

Holotiuk, F., & Beimborn, D. (2017). Critical success factors of digital business strategy.

Kaber, D. B. (2018). Issues in human–automation interaction modeling: Presumptive aspects of frameworks of types and levels of automation. Journal of Cognitive Engineering and Decision Making, 12(1), 7-24.

Orhangazi, Ö. (2019). The role of intangible assets in explaining the investment–profit puzzle. Cambridge Journal of Economics, 43(5), 1251-1286.

Öztürk, H., & Karabulut, T. A. (2018). The relationship between earnings-to-price, current ratio, profit margin and return: an empirical analysis on Istanbul stock exchange. Accounting and Finance Research, 7(1), 109-115.

Singh, D., & Verma, A. (2018). Inventory management in supply chain. Materials Today: Proceedings, 5(2), 3867-3872.

Taghipour, M., Habibi, M. H., & Amin, M. (2020). The Impact of Working Capital Management on the Performance of Firms Listed in Tehran Stock Exchange (TSE). Journal of Multidisciplinary Engineering Science and Technology (JMEST), 7(6), 12146-12154.